Irish Freight & Logistics Monthly – Apr ’11

Irish Ports see Volume Growth in 2010
After the record collapse of shipping volumes in 2009, the Irish Ports and Shipping sector saw a return to growth across most of the principle segments last year, according to the latest annual edition of the Irish Maritime Transport Economist.

The report shows that unitised traffic on the main Roll-on/Roll-off routes to the UK recovered by 4% in 2010, with a decline in the Lift-on/Lift-off container sector easing substantially compared to the 2009 with a fall of just 3%.

The strongest volume recovery occurred in the dry bulk segments which were up 18% Part of the return to growth in this sector is attributed to strong global demand for ore and mineral products such as alumina, while domestic demand in the agricultural sector led to a rise in the imports of grains, feeds and fertilizers. Although the overall picture is positive; the main volume gains in this segment were not evenly distributed among the ports with some of the smaller regional ports still in negative territory for the year. Tanker and liquid bulk volumes were up 2%, while ferry passenger volumes also increased for the full year by 4%.

The report also highlights the continued resilient performance of export trades with estimates that export volumes on the principle routes to the UK, Asia and US were up overall by 7%. The underlying performance of multinational sectors, principally in chemical and pharmaceutical industries, led the export recovery while established indigenous Irish exporting companies, particularly in the food, drink and agri-business segments , also contributed to the strong performance. The report remarks however that imports in the principle segments linked to consumer and household demand remained subdued last year with no noticeable growth.

The report concluded that outlook for 2011 looks likely to be testing for the domestic ports and shipping sectors with less growth forecast across the majority of the shipping segments. The rise of bunker/fuel prices by 136% over the past 12 months will put further pressure on operators to increase freight rates and bunker surcharges.

Nightline Unveils Expansion Plans
Irish delivery firm Nightline has unveiled plans for a multi-million pound expansion of its Dublin headquarters, which will create 50 new jobs. The firm announced that it has been given planning permission to increase its facility at Mygan Park by 40% to handle expected volume growth.

Planning permission for the expansion was given by Fingal County Council in the last week, but so far no date has been set for the six-month construction to begin on the 4,700sq metre project. Nightline’s CEO, John Tuohy, revealed that the development will cost £5 million (US$8.2m) and would take the number of office staff and drivers employed by Nightline above 650.

Tuohy said: “We are performing very strongly, especially given the current economic climate in Ireland, in particular. “That we are able to press on with our physical and business growth illustrates our confidence.” Last May, the firm launched a subsidiary – Eirpost – to capitalise on postal liberalisation in Ireland which swiftly struck up a partnership with one of world’s biggest mail operators, Swiss Post.

Bridgestone Ireland expand their logistics service with IGL
Bridgestone Ireland has announced an expansion of their existing freight agreement with Dublin logistics provider, Irish Global Logistics (IGL). Brian Faherty, Transport Manager of Bridgestone Ireland said: “Bridgestone Ireland was keen to source a transport provider that offered the most operationally and cost effective method of distribution within Ireland whilst keeping the service levels at the highest possible standard. Irish Global have managed to provide us with very high delivery success, whilst dramatically reducing mileage covered and the numbers of trucks on the road by sharing the service with other automotive suppliers. Combined with our own vehicle fleet this allows Bridgestone to provide the best tyre delivery service available in Ireland.”

Robert Dickinson, Managing Director of Irish Global Logistics in Dublin stated: “In co-operation with Bridgestone Ireland, our proposal was to provide a first class service to the customer and maintain the high levels of service expected by Bridgestone Ireland’s customers. To that end we have developed a unique national supply chain based on ‘shared user and staged trunking’. This spreads the overall cost of running trucks across several customers, thereby reducing the cost for each customer but also increasing efficiency by reducing running mileage and avoiding long and expensive journeys.”

Irish Global now handles the distribution for Bridgestone to all 32 counties of Ireland from their main hubs in Dublin and Belfast as well as via IGL’s 12 satellite depots across the country. In addition, Irish Global also provides Bridgestone Ireland with European delivery services from Dublin and now operates vehicles on contract distribution for Bridgestone Ireland.

Brian Faherty continues: “Irish Global offers a very high level of customer care to us, which reflects the levels of attention we afford to our own customers. Information is available immediately from the IGL online systems and any enquiries are dealt with immediately by the Contract Manager in Swords. We have found that Irish Global have been very flexible in dealing with seasonal peaks and coped admirably with the pressures of the heavy snow in December.”

Ireland okays Stena takeover of DFDS Irish Sea services

Stena Line is celebrating after the Irish Competition Authority (ICA) gave the green light to its takeover of DFDS Seaway’s Irish Sea services. The ICA concluded that Stena’s takeover of vessels, related assets, inventory, employees and contracts relating to passenger and freight ferry services operated by DFDS would not substantially lessen competition in markets for goods or services in the Republic of Ireland.

However, the takeover is also being investigated by the UK’s Competition Commission. Stena said: “As the Irish and UK competition processes are separate, we now await the decision of the UK Competition Commission, which is expected by 25 July. “Stena Line has provided an undertaking to the Competition Commission that the acquired business will operate as an autonomous entity until its decision is made.”

Both competition authorities launched a full investigation into Stena’s €50 million (US$62.2m) bid for the Belfast-Birkenhead and Belfast-Heysham services after initial investigations were unable to conclude that the deal would not lessen competition.

In January, three routes on the Irish Sea were closed, sparking fears among hauliers that this, combined with the merger, could drive prices up. Closed were DFDS’s services between Dublin and Birkenhead and Heysham and Stena’s service between Larne and Fleetwood – leaving four ferry firms operating 14 freight-carrying routes.

If the acquisition is given the green light by the UK’s Competition Commission, Stena will operate six. In January, a spokesman for Stena Line said there would still be enough operators on the Irish Sea to ensure that prices would continue to be governed by market forces.

The deal will also see Stena take over port operations at terminals in Belfast, Birkenhead and Heysham and four ships: the chartered Lagan Seaways and Mersey Seaways, on the Liverpool-Belfast route; and the freight carriers Scotia Seaways and Hibernia Seaways.

New logistics trade association for Ireland
The United Kingdom Warehousing Association (UKWA) has announced the formation of the All Ireland Warehousing Association (AIWA). AIWA will embrace all companies in Northern Ireland and the Republic of Ireland that provide warehousing and other logistics support services in the supply chain.

Like UKWA, it is also open to retailers and manufacturers who operate their own warehousing and distribution functions. Operating from an office in Claremorris, County Mayo, AIWA will be directly affiliated to UKWA.
UKWA’s CEO Roger Williams commented that the new organisation will be able to properly serve the needs of the entire Irish warehousing and logistics sector. A dedicated website – www.warehousingireland.ie – is under construction, and an executive steering group will be formed to take the new association forward.

AIWA’s membership categories have been structured to allow companies whose distribution sites are less than 50,000 sq.ft in size to those with facilities of more than 1,000,000 sq.ft to join AIWA cost effectively.

Record Year for Container Movements
Global container traffic reached an all-time high of 560 million teu last year, largely as a result of volume increases through Chinese ports. According to figures released by Paris-based analyst Alphaliner, volumes in 2010 also saw a record year-on-year increase of 14.5% – a dramatic recovery from the losses recorded in 2009 when global port throughput fell 8.9%, the first annual decline ever recorded.

Chinese ports posted a 17.9% increase in throughput to 169 million teu, or 30.1% of last year’s global total, up from 29.3% the year before. China now has nine of the world’s busiest 20 container ports, according to the World Shipping Council, with most recording faster growth than ports in other regions. South American ports came second. with its ports growing 17.6% in 2010.

Alphaliner said: “2011 growth is expected to moderate to 8.4% as volumes return to more sustainable levels with Chinese ports again expected to lead the gains this year.” Hong Kong’s Hutchison Port Holdings regained the top spot as the busiest port operator, with total volumes handles up by 14.9% to 75 million teu last year.

Second-ranked APM Terminals posted growth of only 2%, around 70 million teu, mainly as a result of quitting operations in six locations: Oakland and Savannah in the US, Kaohsiung in Taiwan, Yantian in China, Genoa in Italy and Dunkirk in France. Alphaliner figures recently showed that the world’s idle container fleet had fallen to its lowest level in over two years, despite being under pressure from declining rates. In fact, the analyst has suggested that the number of idle vessels could be reduced further as carriers re-introduce ships to prepare for volume increases during the summer peak season.

DBSchenker Report Good Year Results
All freight operator Deutsche Bahn’s (DB) divisions are now back in the black, following double digit increases in profits last year. Group revenue increased by E5.1 billion (US$7.23bn) to E34.4 billion in 2010, while ebit totalled nearly €1.9 billion, an increase of 10.7% compared to 2009.

DB said it was able to record substantially higher volumes in all its markets last year. This was especially noticeable in rail freight and global logistics activities. Both sectors had suffered significant declines in volumes in 2009. DB Schenker Rail saw volumes surge 21.8% to 415.4 million tonnes, last year, with utilisation rates up 3.8%.

And DB Schenker Logistics’ substantially higher revenues and profits were mainly driven by strong economic growth in Germany and Asian markets. The number of shipments in European land transport increased 15.4%, while air freight volumes rose 18.7% and ocean freight by 15.7%.

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